Dollar Strength and Global Oil Glut Fears Weigh on Crude Prices

Group 1: Ukraine's Impact on Oil Prices - Ukraine has intensified attacks on Russian refineries, halting approximately 300,000 bpd of refining capacity, which is expected to support crude prices by tightening global oil supplies [1] - Ukrainian drone attacks have led to a reduction in Russia's crude-processing runs to 4.98 million bpd in early September, marking the lowest monthly average in over 3.25 years [1] Group 2: US Economic Indicators - Better-than-expected US economic data, including a decrease in weekly initial unemployment claims by 33,000 to 231,000, indicates a stronger labor market, which is supportive of energy demand and crude prices [2] - The Philadelphia Fed business outlook survey increased by 23.5 to an 8-month high of 23.2, surpassing expectations, further bolstering confidence in energy demand [2] Group 3: Global Oil Supply Concerns - The International Energy Agency (IEA) has raised its 2026 global crude surplus estimate to 3.33 million bpd, which is 360,000 bpd higher than previously anticipated, raising concerns about a potential global oil glut [3] - OPEC+ has agreed to increase crude production by 137,000 bpd starting in October, which is less than the previous increases, indicating a cautious approach to restoring production levels [7] Group 4: US Oil Inventory and Production - As of September 12, US crude oil inventories were 4.7% below the seasonal 5-year average, with gasoline and distillate inventories also below their respective averages, suggesting tighter supply conditions [8] - US crude oil production slightly decreased by 0.1% week-over-week to 13.482 million bpd, remaining below the record high of 13.631 million bpd [8] Group 5: Active Oil Rigs - The number of active US oil rigs increased by 2 to 416 rigs, slightly above the 4-year low, indicating a modest recovery in drilling activity [9]